[Federal Register Volume 60, Number 60 (Wednesday, March 29, 1995)]
[Notices]
[Pages 16144-16147]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-7631]



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FEDERAL TRADE COMMISSION
[Filed No. 911 0095]


La Asociacion Medica de Puerto Rico, et al.; Proposed Consent 
Agreement With Analysis to Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed Consent Agreement.

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SUMMARY: In settlement of alleged violations of federal law prohibiting 
unfair acts and practices and unfair methods of competition, this 
consent agreement, accepted subject to final Commission approval, would 
prohibit, among other things, the Medical Association, the Physiatry 
Section, and the two doctors from encouraging, organizing or entering 
into: any boycott or refusal to deal with any third-party payer; or any 
agreement to refuse to provide services to patients covered by any 
third-party payer. In addition, the consent agreement would prohibit, 
for five years, the respondents from soliciting information from 
physiatrists regarding their decisions whether to participate in 
agreements with insurers and provide service; from passing such 
information along to other doctors; and from giving physiatrists advice 
about making those decisions.

DATES: Comments must be received on or before May 30, 1995.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary, 
Room 159, 6th St. and Pa. Ave., NW., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT:
Alan Loughnan or Alice Au, New York Regional Office, Federal Trade 
Commission, 150 William St., Suite 1300, New York, N.Y. 10038. (212) 
264-1207.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Section 2.34 of 
the Commission's Rules of Practice (16 CFR 2.34), notice is hereby 
given that the following consent agreement containing a consent order 
to cease and desist, having been filed with and accepted, subject to 
final approval, by the Commission, has been placed on the public record 
for a period of sixty (60) days. Public comment is invited. Such 
comments or views will be considered by the Commission and will be 
available for inspection and copying at its principal office in 
accordance with Sec. 4.9(b)(6)(ii) of the Commission's Rules of 
Practice (16 CFR 4.9(b)(6)(ii)).

Agreement Containing Consent Order To Cease and Desist

    In the Matter of : La Asociacio Medica de Puerto Rico, an 
unincorporated association, La Seccion de Fisiatria de La Asociacion 
Medica de Puerto Rico, an unincorporated association, Rafael L. Oms, 
M.D., individually and as an officer of La Seccion de Fisiatria de 
la Asociacion Medica de Puerto Rico, and Rafael E. Sein, M.D., 
individually and as an officer of La Seccion de Fisiatria de la 
Asociacion Medica de Puerto Rico.

    [[Page 16145]] The Federal Trade Commission having initiated an 
investigation of certain acts and practices of La Asociacion Medica de 
Puerto Rico, (``La Asociacion Medica'') an unincorporated association; 
La Seccion de Fisiatria de la Asociacion Medica de Puerto Rico, (``La 
Seccion de Fisiatria'') an unincorporated association; Rafael L. Oms, 
M.D. (``Oms''), individually and as an officer of La Seccion de 
Fisiatria de la Asociacion Medica de Puerto Rico; and Rafael E. Sein, 
M.D. (``Sein''), individually and as an officer of La Medica de 
Fisiatria de la Asociacion Medica de Puerto Rico (hereinafter sometimes 
referred to as ``proposed respondents''); and it now appearing that the 
proposed respondents are willing to enter into an agreement containing 
an order to cease and desist from the use of the acts and practices 
being investigated, and providing for other relief:
    It is hereby agreed by and between the proposed respondents, by 
their duly authorized officers and their attorneys, and counsel for the 
Federal Trade Commission that:
    1. Proposed respondents La Asociacion Medica and La Seccion de 
Fisiatria are unincorporated associations organized, existing, and 
doing business under and by virtue of the laws of the Commonwealth of 
Puerto Rico, with their offices and principal place of business at Ave. 
Fernandez Juncos Num. 1305, Apartado 9387, Santurce, Puerto Rico, 
00908.
    Proposed respondents Dr. Oms and Dr. Sein are physiatrists, 
licensed to practice medicine in the Commonwealth of Puerto Rico. Drs. 
Oms and Sein have at relevant times been officers of La Seccion de 
Fisiatria. Dr. Oms' business address is Palmas Mail Station, Box 879, 
Suite 170, Humacao, Puerto Rico, 00792, and Dr. Sein's business address 
is 11746 Fernandez Juncos Station, San Juan, Puerto Rico 00910-1746.
    2. Proposed respondents admit all the jurisdictional facts set 
forth in the draft of complaint.
    3. Proposed respondents waive:
    (a) Any further procedural steps;
    (b) The requirement that the Commission's decision contain a 
statement of findings of fact and conclusions of law;
    (c) All rights to seek judicial review or otherwise to challenge or 
contest the validity of the order entered pursuant to this agreement; 
and
    (d) Any claim under the Equal Access to Justice Act.
    4. This agreement shall not become part of the public record of the 
proceeding unless and until it is accepted by the Commission. If this 
agreement is accepted by the Commission, it, together with the draft of 
complaint contemplated thereby, will be placed on the public record for 
a period of sixty (60) days and information in respect thereto publicly 
released. The Commission thereafter may either withdraw its acceptance 
of this agreement and so notify the proposed respondents, in which 
event it will take such action as it may consider appropriate, or issue 
and serve its complaint (in such form as the circumstances may require) 
and decision, in disposition of the proceeding.
    5. This agreement is for settlement purposes only and does not 
constitute an admission by proposed respondents that the law has been 
violated as alleged in the draft of complaint, or that the facts as 
alleged in the draft complaint, other than jurisdictional facts, are 
true.
    6. This agreement contemplates that, if it is accepted by the 
Commission, and if such acceptance is not subsequently withdrawn by the 
Commission pursuant to the provisions of Sec. 2.34 of the Commission's 
Rules, the Commission may, without further notice to proposed 
respondents: (1) Issue its complaint corresponding in form and 
substance with the draft of complaint and its decision containing the 
following order to cease and desist in disposition of the proceeding; 
and (2) make information public in respect thereto. When so entered, 
the order to cease and desist shall have the same force and effect and 
may be altered, modified or set aside in the same manner and within the 
same time provided by statute for other orders. The order shall become 
final upon service. Delivery by the U.S. Postal Service of the 
complaint and decision containing the agreed-to order to proposed 
respondents' address as stated in this agreement shall constitute 
service. Proposed respondents waive any right they may have to any 
other manner of service. The complaint may be used in construing the 
terms of the order, and no agreement, understanding, representation, or 
interpretation not contained in the order or the agreement may be used 
to vary or contradict the terms of the order.
    7. Proposed respondents have read the draft of complaint and order 
contemplated hereby. Proposed respondents understand that once the 
order has been issued, they will be required to file one or more 
compliance reports showing that they have fully complied with the 
order. Proposed respondents further understand that they may be liable 
for civil penalties in the amount provided by law for each violation of 
the order after it becomes final.

Order

I

    It is ordered that, as used in this order, the following 
definitions shall apply:
    A. ``La Asociacion Medica'' means La Asociacion Medica de Puerto 
Rico, the Medical Association of Puerto Rico, its predecessors, 
sections, committees, subsidiaries, divisions, groups, and affiliates, 
and their respective directors, officers, employees, agents, 
consultants, and any other persons working for or on behalf of the 
foregoing, and their respective successors and assigns;
    B. ``La Seccion de Fisiatria'' means La Seccion de Fisiatria de la 
Asociacion Medica de Puerto Rico, the Physiatry Section of the Medical 
Association of Puerto Rico, its predecessors, sections, committees, 
subsidiaries, divisions, groups, and affiliates and their respective 
directors, officers, employees, agents, consultants, and any other 
persons working for or on behalf of the foregoing, and their respective 
successors and assigns;
    C. ``Rafael Oms'' means Rafael L. Oms, M.D., his agents, and 
employees;
    D. ``Rafael Sein'' means Rafael E. Sein, M.D., his agents, and 
employees;
    E. ``Third-party payer'' means any person or entity that provides a 
program or plan pursuant to which such person or entity agrees to pay 
for treatment by physicians or therapists to individuals described in 
the plan or program as eligible for such coverage (``Covered 
Persons''), and includes, but is not limited to, health insurance 
companies; prepaid hospital, medical, or other health service plans, 
whether operated by a private or governmental entity; health 
maintenance organizations; preferred provider organizations; 
prescription service administrative organizations; health benefits 
programs for government employees, retirees, and dependents; 
administrators of self-insured health benefits programs; and employers 
or other entities providing self-insured health benefits programs; and
    F. ``Participation agreement'' means any existing or proposed 
agreement, oral or written, in which a third-party payer agrees to 
reimburse a physician or therapist for the provision of medical, 
physical therapy, or other health-care services to Covered Persons, and 
the physician or therapist agrees to accept such payment from the 
third-party payer for such provision of medical, physical therapy, or 
other health-care [[Page 16146]] services during the term of the 
agreement.

II

    It is further ordered that respondents, directly or indirectly, or 
through any corporate or other device, in or in connection with their 
activities in or affecting commerce, as ``commerce'' is defined in 
Section 4 of the Federal Trade Commission Act, 15 U.S.C. 44, forthwith 
cease and desist from:
    A. Entering into, threatening or attempting to enter into, 
organizing or attempting to organize, encouraging, continuing, 
cooperating in or carrying out any agreement, either express or 
implied, between or among any physiatrists, to boycott or refuse to 
deal with any third-party payer, or to withdraw from, threaten to 
withdraw from, refuse to enter into, or threaten to refuse to enter 
into any proposed or existing participation agreement;
    B. Entering into, threatening or attempting to enter into, 
organizing or attempting to organize, encouraging, continuing, 
cooperating in or carrying out any agreement, either express or 
implied, between or among any physiatrists, to refuse to provide 
services to patients covered by any third-party payer in any proposed 
or existing participation agreement, or to threaten to refuse to 
provide services to such patients;
    C. For a period of five (5) years after the date this order becomes 
final, continuing a formal or informal meeting of physiatrists after:
    1. Any person makes any statement concerning one or more 
physiatrists' intentions or decisions with respect to
    a. Entering into, refusing to enter into, threatening to refuse to 
enter into, participating in, threatening to withdraw from, or 
withdrawing from any existing or proposed participation agreement; or
    b. Refusing or threatening to refuse to provide services to 
patients covered by any third-party payer in any existing or proposed 
participation agreement;

 and respondents La Asociacion Meedica and La Seccion de Fisiatria fail 
to eject such person from the meeting; or
    2. Two persons make statements prohibited in order Paragraphs 
II.C.1.a. or II.C.1.b.;

provided, however, that respondent Oms or Sein shall not be in 
violation of the order if, immediately following a violation of this 
paragraph of the order, he leaves a meeting continued in violation of 
this paragraph, and within thirty (30) days after such meeting, reports 
to the Commission the circumstances of such meeting, the substance and 
source of the prohibited statements, and the respondents' actions in 
response thereto;
    D. For a period of five (5) years after the date this order becomes 
final, providing advice to any physiatrist regarding
    1. The desirability or appropriateness of participating in any 
existing or proposed participation agreement; or
    2. Refusing or threatening to refuse to provide services to 
patients covered by any third-party payer in any existing or proposed 
participation agreement;

provided, however, that nothing contained in this Paragraph II.D. shall 
prohibit respondents from communicating purely factual information 
describing the terms and conditions of any participation agreement or 
operations of any third-party payer;
    E. For a period of five (5) years after the date this order becomes 
final, communicating in any way to any physiatrist any information 
concerning any physiatrist's intentions or decisions with respect to
    1. Entering into, refusing to enter into, threatening to refuse to 
enter into, participating in, threatening to withdraw from, or 
withdrawing from any existing or proposed participation agreement; or
    2. Refusing or threatening to refuse to provide services to 
patients covered by any third-party payer in any existing or proposed 
participation agreement; or
    F. For a period of five (5) years after the date this order becomes 
final, soliciting from any physiatrist any information concerning that 
physiatrist's or any other physiatrist's intentions or decisions with 
respect to
    1. Entering into, refusing to enter into, threatening to refuse to 
enter into, participating in, threatening to withdraw from, or 
withdrawing from any existing or proposed participation agreement;
    2. Refusing or threatening to refuse to provide services to 
patients covered by any third-party payer in any existing or proposed 
participation agreement.
    Provided, however, that nothing in this order shall be construed to 
prevent respondents from exercising rights permitted under the First 
Amendment to the United States Constitution to petition any federal, 
state, or commonwealth government executive agency or legislative body 
concerning legislation, rules, programs, or procedures, or to 
participate in any federal, state or commonwealth administrative or 
judicial proceeding;
    Provided further that this order shall not be construed to prohibit 
any respondent or any member of respondent associations from entering 
into an agreement or combination with any other physician or health 
care practitioner with whom the individual physician practices in 
partnership or in a professional corporation, or who is employed by the 
same person.

III

    It is further ordered that this order shall not be construed to 
prohibit respondents Drs. Oms or Sein from communicating medical 
conditions or personal assessments of individual patients, where such 
communication neither nor is part of (1) an agreement, proposed 
agreement, or attempt to enter into an agreement among physiatrists to 
boycott or refuse to deal with any third-party payer, or (2) any other 
agreement, combination, or conspiracy the purpose, effect, or likely 
effect of which is to impede competition unreasonably.

IV

    It is further ordered that:
    A. La Seccion de Fisiatria, within thirty (30) days after the date 
on which this order becomes final, distribute by first-class mail a 
copy of this order and the accompanying compliant to each of its 
current members, and to the last known address of any other person who 
was a member of La Seccion de Fisiatria in 1990 or 1991;
    B. La Asociacion Medica, within thirty (30) days after the date on 
which this order becomes final, distribute by first-class mail a copy 
of this order and the accompanying complaint to each of its current 
members who is not also a member of La Seccion de Fisiatria;
    C. La Seccion de Fisiatria, within thirty (30) days after the date 
on which this order becomes final, distribution by first-class mail a 
copy of this order and the accompanying complaint to each third-party 
payer with whom La Seccion de Fisiatria has entered into negotiations 
concerning the provision of physiatry services;
    D. La Asociacion Medica, within sixty (60) days after the date on 
which this order becomes final, publish in Spanish this order and the 
accompanying complaint in an issue of Prensa Medica or in any successor 
publication, in the same type size normally used for articles that are 
published in Prensa Medica  or successor publication;
    E. La Seccion de Fisiatria and La Asociacion Medica, for a period 
of five (5) years after the date on which this order becomes final, 
provide each new member of La Seccion de Fisiatria and new member of La 
Asociacion Medica with a copy of this order at the time the member is 
accepted into membership of [[Page 16147]] La Seccion de Fisiatria or 
La Asociacion Medica;
    F. La Seccion de Fisiatria and La Asociacion Medica each file a 
verified, written report with the Commission within ninety (90) days 
after the date on which this order becomes final, and annually 
thereafter for five (5) years on the anniversary of the date on which 
this order becomes final, and at such other times as the Commission may 
require, by written notice to La Seccion de Fisiatria or La Asociacion 
Medica, setting forth in detail the manner and form in which it has 
complied and is complying with this order;
    G. La Seccion de Fisiatria and La Asociacion Medica for a period of 
five (5) years after the date on which this order becomes final, 
maintain and make available to Commission staff, for inspection and 
copying upon reasonable notice, records sufficient to describe in 
detail any action taken in connection with the activities covered by 
Parts II and IV of this order;
    H. For a period of five (5) years after the date on which this 
order becomes final, La Seccion de Fisiatria and La Asociacion Medica 
notify the Commission at least thirty (30) days prior to any proposed 
change in La Seccion de Fisiatria or La Asociacion Medica, such as 
dissolution, assignment, or sale resulting in the emergence of a 
successor corporation or association, a change of name, a change of 
address, or any other change that may affect compliance obligations 
with this order.
    It is further ordered that this order shall terminate on March 30, 
2015.

Analysis of Proposed Consent Order to Aid Public Comment

    The Federal Trade Commission has accepted an agreement to a 
proposed consent order from La Asociacion Medica de Puerto Rico (``La 
Asociacio Medica''), an unincorporated association; La Seccion de 
Fisiatria de la Asociacion Medica de Puerto Rico (``La Seccion de 
Fisiatria''), an unincorporated association; Rafael L. Oms, M.D.; and 
Rafael E. Sein, M.D.
    The proposed consent order has been placed on the public record for 
sixty (60) days for reception of comments by interested persons. 
Comments received during this period will become part of the public 
record. After sixty (60) days, the Commission will again review the 
agreement and the comments received and will decide whether it should 
withdraw from the agreement or make final the agreement's proposed 
order.
    The complaint alleges that La Asociacion Medica, La Seccion de 
Fisiatria, Dr. Oms, Dr. Sein, and others have restrained competition 
among physiatrists by conspiring to engage in a concerted refusal to 
deal with La Administracion de Compensaciones por Accidentes de 
Automoviles (``Administration for Compensation of Automobile 
Accidents'' or ``ACAA'') or to treat ACAA Patients. ACAA is a third-
party payer that provides health coverage to automobile accident 
victims in Puerto Rico. The complaint alleges that this conduct 
violates section 5 of the Federal Trade Commission Act.
    The respondents have signed a consent agreement that prohibits them 
from engaging in unlawful concerted action. Paragraph A of Section II 
prohibits the respondents from entering into, threatening or attempting 
to enter into, organizing or attempting to organize, encouraging, 
continuing, cooperating, in, or carrying out any agreement with an 
insurer. Paragraph B is similar to Paragraph A, but prohibits refusals 
or threats to refuse to provide services to patients covered by any 
insurer. The complaint alleges that the physiatrists attempted to 
coerce ACAA through a concerted refusal to treat certain patients 
insured by ACAA.
    Paragraphs C, D, E, and F of Section II are fencing-in paragraphs 
intended to prevent the respondents from engaging in actions that might 
in the future facilitate a concerted refusal to deal with an insurer of 
covered patients. The fencing-in provisions of Section II shall 
terminate five years after the date of issuance of the order. Paragraph 
C prohibits the respondents from continuing any meeting of physiatrists 
at which any person makes a statement about intentions or decisions 
with respect to entry into, withdrawal from, or refusal to provide 
services to patients in connection with any participation agreement, 
unless such person is ejected from he meeting by La Asociacion Medica 
and La Seccion de Fisiatria. Paragraph C also prohibits respondents 
from continuing any meeting at which two persons make such statements. 
Although Drs. Oms and Seibn are not required to eject a person from a 
meeting, Drs. Oms and Sein are required to leave any meeting at which 
any person makes a statement about intentions or decision with respect 
to entry into, withdrawal from, or refusal to provide services to 
patients in connection with any participation agreements, unless such 
person is ejected from the meeting by La Asociation Medica and La 
Seccion de Fisiatri; or at which two persons makes such statements. 
After Drs. Oms and Sein leave such a meeting, they re required to 
report to the Commission the circumstances of the meeting.
    Paragraph D of Section II prohibits respondents from providing 
advice to any physiatrist on the desirability or appropriateness of 
participating in or refusing to provide services to patients covered by 
any insurer's program (but permits purely factual communications 
describing the terms of a participation agreement). Paragraph E 
prohibits respondents from communication to any physiatrist information 
concerning any other physiatrist's intention or decision with respect 
to entry into, withdrawal from, or refusal to provide services to 
patients covered by any participation agreement. Paragraph F prohibits 
respondents from soliciting information from any physiatrist concerning 
that person's or any other physiatrist's intention or decision with 
respect to entry into, withdrawal from, or refusal to provide services 
to patients covered by any participation agreement.
    Section II contains a provision stating that the order does not 
impair respondents' First Amendment rights to petition the government. 
Section I also contains another proviso stating that the order does not 
prevent respondents or association members from forming physician 
partnerships or professional corporations.
    Section III of the proposed order makes clear that the order does 
not prevent individual respondents Drs. Oms or Sein from communicating 
medical conditions or personal assessments of individual patients, 
where such communication neither constitutes nor is part of (1) an 
agreement among physiatrists to boycott or refuse to deal with any 
third-party payer, or (2) any other agreement, combination, or 
conspiracy the purpose, effect, or likely effect of which is to impede 
competition unreasonably.
    Secion IV of the proposed order contains standard notification and 
compliance provisions. These notification, reporting, and record 
keeping requirements apply only to La Asociacion Medica and La Seccion 
de Fisiatria.
    Finally, Section V of the proposed order contains a twenty year 
``sunset'' provision. Under this section, the terms of the order shall 
terminate twenty years after the date of issuance of the order.
    The purpose of this analysis is to facilitate public comment on the 
proposed order, and it is not intended to constitute an official 
interpretation of the agreement and proposed order or to modify in any 
way their terms.
Donald S. Clark,
Secretary.
[FR Doc. 95-7631 Filed 3-28-95; 8:45 am]
BILLING CODE 6750-01-M